Abstract
GST means Goods and Service Tax. Goods and Service Tax is a complete tax imposed on manufacture, sale and
utilization of goods and service. It is mostly a substitute of all indirect taxes which imposed on goods and services
by the Central and State government of India. Goods and Services Tax would be levied and collected at each stage
of sale or purchase of goods or services based on the input tax credit process. The main objective of GST is One
Nation, One Tax and One Market. It was introduced as a multi-stage, destination based tax that will be levied on
every value addition by avoiding the cascading effect of tax. It is such type of tax till the ultimate consumers will
improve competitiveness of original goods and services in the market which directly impact on GDP growth of the
country. In this paper we analysis the economic benefit of Goods and Services Tax on Indian Tax Scenario.
INTRODUCTION
GST stands for Goods and Services Tax, which will be levied on the supply of goods or services or both in India. GST
will subsume a number of existing indirect taxes being levied by the Centre and State Governments, including Central
Excise duty, Additional Excise duty, Service Tax, VAT, Purchase Tax, Entertainment Tax ( other than the tax levied by
local bodies), Central Sales Tax, Entry Tax, Local Body Taxes, Tax on lottery, Octroi, Luxury Tax, etc. It brings
benefits to all the stakeholders‟ viz. industry, government and the citizens. It is expected to lower the cost of goods and
services, boost the economy and make our products and services globally competitive. GST aims to make India a
common national market with uniform tax rates and procedures and removes the economic barriers, thereby paving the
way for an integrated economy at the national level. By subsuming most of the Central and State indirect taxes into a
single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, GST would
mitigate the ill effects of cascading and thereby improve our competitiveness. GST is a destination based consumption
tax. It has been designed in a manner so that the tax is collected at every stage and the credit of tax paid at the previous
stage is available to set off the tax to be paid at the next stage of transaction, thereby eliminating cascading of taxes.
This eradicates “tax on tax” and allows cross utilization of input tax credits, which benefit the industry by making the
entire supply chain tax neutral.
RESEARCH METHODOLOGY
The Researchers used an exploratory research technique based on past literature from respective newspapers,
government reports, journals, annual reports and magazines covering wide collection of academic literature on Goods
and Service Tax. According to the objectives of the study, the research design is of descriptive in nature. Available
secondary data was extensively used for the study.
CONCEPT OF GST
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 and was applicable
throughout India which replaced multiple cascading taxes levied by the central and state governments. It was introduced
as The Constitution (One Hundred and First Amendment) Act 2017following the passage of Constitution 122nd
Amendment Bill.The GST is a Value added Tax (VAT) proposed to be a comprehensive indirect tax levy on
manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes
levied on goods and services by the Indian Central and state governments. It is aimed at being comprehensive for most
goods and services. The GST is governed by a GST Council and its Chairman is the Finance minister of India. The
Goods and Services Tax is meant to be a unified indirect tax across the country on products and services. In the existing
Advantages of GST
This is a federal law, which means that the states will no longer have the right to make new laws on taxation
towards goods and services.
It simplifies the tax system and makes it easier to understand as well as cheaper to implement at various levels.
Tax evasion at various stages will be eliminated as tax offsets can be collected only if taxes have been paid
originally. You will also be able to buy raw materials or constituent materials for production only from those who
have paid taxes, in order to claim benefits.
It will be cheaper to buy input goods and services for production from other states.
The current supply and distribution chain may undergo a change with a change in taxation system that does away
with excise and customs duties.
The consumer will get the end-product at cheaper rates because of elimination of multiple taxes and the tax
cascade.
As of now, petroleum and petroleum products have been kept out of the GST regime until further notice.
Sale of newspapers and advertisements are also likely to fall under the GST regime, allowing the government to
increase its revenue considerably.
While there will be central GST and state GST, the tax applicable on goods and services being exported and
imported between states in India would fall under an Integrated GST (GST) system in order to avoid conflict of
dominion.
Disadvantages of GST
GST is not good news for all sectors, though. In the current system, many products are exempted from taxation.
The GST proposes to have minimal exemption list. Currently, higher taxes are levied on fewer items, but with
GST, lower taxes will be levied on almost all items.
GST is not applicable on liquor for human consumption. So alcohol rates will not get any advantage of GST.
Stamp duty will not fall under the GST regime and will continue to be imposed by states.
CONCLUSION
Tax policies play an important role on the economy through their impact on both efficiency and equity. A good tax
system should keep in view issues of income distribution and, at the same time, also endeavour to generate tax revenues
to support government expenditure on public services and infrastructure development. GST is the most logical steps
towards the comprehensive indirect tax reform in our country since independence. GST is expected to raise overall
Indian welfare and is projected to be an inclusive policy in that it would be welfare improving for all Indian states.GST
is leviable on all supply of goods and provision of services as well combination thereof. All sectors of economy whether
the industry, business including Govt. departments and service sector shall have to bear impact of GST. One of the
biggest taxation reforms in India -- the Goods and Service Tax (GST) -- is all set to integrate State economies and boost
overall growth. GST will create a single, unified Indian market to make the economy stronger.
REFERENCES
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[5] Reference on Goods & Services Tax by ICSI
[6] http://www.economictimes.com
[7] http://www.gstindia.com
[8] https://en.wikipedia.org
[9] https://cbec-gst.gov.in
[10] http://www.gstseva.com
[11] http://empcom.gov.
[12] http://economictimes.indiatimes.com